Good morning! Welcome to our final 2024 edition. This year, we wrote nearly 500k words and generated ~50 million impressions. It’s been a solid year for the S&P 500 too (up 24.5%) and even meme stocks are having a moment again.

One Tesla investor thinks Elon Musk is working more for Trump and less for Tesla’s shareholders. Investors are proving Ken Griffin wrong after he recently declared the multi-strat fund boom a thing of the past. And Americans poured $1 trillion into ETFs in 2024.

Plus, dating apps will be dropping AI features, and the Nissan / Honda mega-deal is leaving global banking players scrambling for a foothold.

Investors are no longer conducting due diligence manually—they are automating DD with Hebbia. Test it out today.

_{SQUEEZ OF THE DAY}

Is the Alternatives Era Just a Cash Grab?

We’re in the alternatives era… and it’s not just for the rich or Blackstone’s LPs. Financial advisors and Wall Street firms alike are “inviting” more and more retail investors to invest in alts. While the packaging might exude exclusivity, some experts argue it’s more about generating fee income than democratizing wealth.

Alternative investments—spanning private equity, hedge funds, venture capital, non-traded real estate, and private credit—offer diversification and potential outsized returns.

The pitch gains traction amid concerns about overvalued public markets. But these vehicles often come with steep costs, including annual management fees ranging from 2% to 6% and commissions exceeding 10%, making them significant revenue generators for Wall Street.

With declining revenues from traditional products like mutual funds and stock commissions, the finance industry is doubling down on private markets. Simultaneously, Washington is lowering barriers for retail investors through potential legislation, including passing a quick exam to qualify for alternative investments.

Yet, investing in alternatives is fraught with challenges: illiquidity, conflicts of interest, opaque valuation methodologies, and extended lock-up periods. Some funds rely heavily on leverage, magnifying risk, while others are accused of overstating asset values or engaging in dubious practices.

Takeaway: Wall Street’s invitation to the private markets may feel exclusive, but exclusivity isn’t synonymous with prudence. As the Wall Street Journal’s Jason Zweig notes, unless you possess significant capital, risk tolerance, and expertise, it might be wiser to RSVP with a firm “no thanks.”

_{PRESENTED BY HEBBIA}

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_HEADLINES

Top Reads

• Meme stocks had their moment again in 2024 (WP)

• NYSE to close on January 9th in honor of Jimmy Carter (CNBC)

• Gronkowski agrees with Musk on need for simplified US tax code (Fox)

• Tesla investor says Elon Musk is working more for Trump, less for Tesla (YF)

• Investors tell Ken Griffin multi-strategy funds are still booming (YF)

• A record-shattering $1 trillion poured into ETFs in 2024 (WSJ)

• Dating apps prepare to launch AI features (Guardian)

• Nissan mega-deal sets up next fight for bankers in Japan (YF)

• The one soft spot in the economy heading into 2025 (WSJ)

• Airline stocks beat market by most in a decade (YF)

• What billionaires have to say about AI heading into 2025 (CNBC)

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Markets Rundown

Stocks Slide to Start the Week

Equity markets closed lower on Monday, with the S&P 500 down 1.1%, extending Friday's risk-off session. All 11 sectors of the S&P 500 ended in negative territory, reflecting a broad-based pullback.

The decline appears to be driven by profit-taking and rebalancing following a strong year of equity-market performance, rather than any key corporate or economic news. 

Asian markets were mixed overnight, while European markets traded mostly lower. Bond yields eased, with the 10-year Treasury yield falling to 4.54% and the 2-year Treasury yield down to 4.26%.

U.S. Equities Lead Global Markets in 2024

U.S. stocks have outperformed in 2024, with the S&P 500 up nearly 27%, including dividends, through Friday. Small- and mid-cap stocks also posted strong returns, with the Russell 2000 and Russell Mid-cap Indexes up more than 12% each.

International markets lagged, with the MSCI EAFE Index (developed international stocks) gaining just 5% and the MSCI EM Index (emerging markets) up 8.8%.

U.S. outperformance was fueled by strong economic momentum, corporate profit growth, and a stronger dollar, which weighed on international returns.

Housing Market Data in Focus

Pending home sales for November rose to 79, exceeding expectations and marking the highest reading since February 2023. However, the index remains below the long-run average of 102, reflecting the ongoing impact of elevated interest rates on housing activity.

Higher rates have made financing new homes more expensive and discouraged existing homeowners from selling due to lower rates on pre-2022 mortgages.

Movers & Shakers

• (+) EQT Corp. ($EQT) +5% after natural gas prices futures headed towards best year since 2016.

• (–) Boeing Co. ($BA) -2% after a plane crashed in South Korea.

• (–) MicroStrategy ($MSTR) -8% after selling more stock to buy Bitcoin.

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

_{BOOK OF THE DAY}

The Rising

After the terrorist attacks of 9/11 destroyed the World Trade Center, New Yorkers and Americans faced a critical set of questions: What should be done with the site? Could the towers be replaced? And how best to memorialize those lost on that day?

For Larry Silverstein, a lifelong New Yorker who had signed a lease for the properties just a few months before the attacks, the answer was clear: America had to rebuild as quickly as possible.

In The Rising, Silverstein recounts in vivid detail his long battle to construct a new World Trade Center complex and to revitalize the surrounding neighborhood while also memorializing the victims of the attacks. Silverstein made history in 2001 when he signed a 99-year lease on the 10.6-million-square-foot World Trade Center for $3.25 billion.

For the next twenty years, he navigated warring political interests, byzantine city bureaucracies, and resistant insurance companies, as well as the many challenges of designing, engineering, and constructing several new towers in the heart of downtown Manhattan.

More than once the entire project almost folded, but today the buildings are nearly complete and the neighborhood is once again a thriving hub that draws hundreds of thousands of people a day.

The Rising is a vibrant portrait of the inner workings of New York City in the wake of its most profound tragedy, but it is also a master class in how to succeed in business despite all odds. Full of outsize characters and relentless adversity, this is a riveting book about a remarkable feat of vision and determination. 

“The never-before-told inside story of the rebuilding of the World Trade Center — an epic tale of business, politics, and engineering by the man who spent two decades working to make it happen.”

_{DAILY VISUAL}

$417 for a Hotel Room in New York

_{PRESENTED BY KALSHI}

What Will Inflation Look Like in 2025?

Inflation is one of the most closely watched economic indicators, and 2025 brings new questions about where it’s headed. Kalshi traders are weighing in on the most likely ranges:

• 2.6%-3.0%: Current frontrunner with a 30% probability

• 2.1%-2.5%: A close second at 23% probability

• 3.1%-3.5%: Less likely but still on the radar at 15% probability

With factors like global supply chains and evolving Fed policy at play, these predictions offer a glimpse into what markets are expecting. Where do you see inflation landing next year?

_{DAILY ACUMEN}

Overwhelmed

Feeling overwhelmed has become a common struggle in today’s fast-paced world. With constant notifications, demanding responsibilities, and an ever-present fear of not doing enough, it’s no surprise that many feel drained.

Clinical psychologist Linda Blair explains that the sheer volume of tasks, combined with technology training our brains to be constantly distracted, makes focusing difficult. This chronic state of overwhelm can lead to procrastination, irritability, and even physical health issues like increased risks of diabetes and heart disease.

Overwhelm often arises when demands exceed our mental capacity, leading to decision fatigue and self-doubt. Short-term overwhelm can be reversed with rest and mental recharging activities, such as exercise, spending time with loved ones, or simply taking breaks. However, when left unaddressed, it can escalate to burnout, requiring a longer recovery.

Experts emphasize the importance of managing your time realistically, avoiding multitasking, and breaking tasks into smaller, actionable steps. Instead of focusing on productivity myths, it’s crucial to align with reality, set achievable goals, and prioritize self-care. Recognizing that no one has unlimited energy is key to breaking the cycle and regaining control.

_{ENLIGHTENMENT}

Short Squeez Picks

• How to follow up with someone without annoying them

• Positive attitudes boosts passion and determination

• How to spark happiness during tough times

• Are smarter people nicer?

• How to let go of the need for approval at work

_{MEME-A-PALOOZA}

Memes of the Day